China stocks slip but sun shines on tariff-sensitive sectors

Chinese stock markets fell on Wednesday, with shares in energy companies leading losses as they tracked falling oil prices, though slightly slimmer chances of Republican candidate Donald Trump winning the US presidency boosted exporters' shares.

At the close, the Shanghai Composite index was down 0.82 per cent at 2,721.80. Hong Kong's Hang Seng closed 0.7 per cent lower at 17,108.71.

China's blue-chip CSI300 index fell 0.3 per cent, with its financial sector sub-index lower by 1.3 per cent, and the oil and gas industry sub-index shedding 1.7 per cent. The electric vehicle index rose 3.3 per cent.

Betting markets shortened odds of Democrat Kamala Harris winning the US presidency following a combative televised debate, and traders sold dollars and bought yuan with the risk of punitive tariffs on Chinese goods seen slightly reduced.

The largest percentage gainers in the Shanghai Composite index were solar firm GoodWe Technologies, up 12.5 per cent, and Jinzhou Yongshan Lithium, gaining 10.1 per cent, as lithium producers were bought on an unconfirmed report of battery-maker CATL suspending some mining.

A bounce in Wuxi Apptec, pummelled recently by restrictions working their way through US Congress but up 7 per cent following a buyback announcement, led gains in Hong Kong that also included EV makers BYD and Geely.

However oil has dropped below $70 a barrel to trade near three-year lows and pulled down big energy companies and the indexes.

China Resources Power Holdings, which fell 5.7 per cent, was the top loser on the Hang Seng, with PetroChina down 1.4 per cent, CNOOC down 2.3 per cent and Sinopec down 3 per cent.

China's weak economic outlook also put consumer stocks such as sports gear seller Li Ning Co Ltd, down 4.1 per cent, and large financials such as ICBC and Bank of China among the losers and at reasonably solid volumes.

The yuan was quoted at 7.1131 per US dollar, 0.1 per cent firmer than the previous close of 7.12 and Hong Kong interbank rates fell.

Around the region, MSCI's Asia ex-Japan stock index was weaker by 0.2 per cent, while Japan's Nikkei index was down 1.5 per cent.

About 24.23 billion shares were traded on the Shanghai exchange, roughly 87.9 per cent of the market's 30-day moving average. About 3.07 billion Hang Seng index shares were traded, roughly 121.8 per cent of the market's 30-day moving average.